164 week ago — 15 min read
The GST Council’s 45th meeting was held on 17 September, 2021 in Lucknow under the chairmanship of the Union Finance & Corporate Affairs Minister Nirmala Sitharaman. The GST Council has inter-alia made the following recommendations relating to changes in GST rates on supply of goods and services and changes related to GST law and procedure:
1. Extension of existing concessional GST rates (currently valid till 30th September, 2021) on following Covid-19 treatment drugs, up to 31st December, 2021, namely-
2. Reduction of GST rate to 5% on more Covid-19 treatment drugs, up to 31st December, 2021, namely-
S. No. |
Description |
From |
To |
GST rate changes |
|||
1. |
Retro fitment kits for vehicles used by the disabled |
Appl. rate |
5% |
2. |
Fortified Rice Kernels for schemes like ICDS etc. |
18% |
5% |
3. |
Medicine Keytruda for treatment of cancer |
12% |
5% |
4. |
Biodiesel supplied to OMCs for blending with Diesel |
12% |
5% |
5. |
Ores and concentrates of metals such as iron, copper, aluminum, zinc and few others |
5% |
18% |
6. |
Specified Renewable Energy Devices and parts |
5% |
12% |
7. |
Cartons, boxes, bags, packing containers of paper etc. |
12%/18% |
18% |
8. |
Waste and scrap of polyurethanes and other plastics |
5% |
18% |
9. |
All kinds of pens |
12%/18% |
18% |
10. |
Railway parts, locomotives & other goods in Chapter 86 |
12% |
18% |
11. |
Miscellaneous goods of paper like cards, catalogue, printed material (Chapter 49 of tariff) |
12% |
18% |
12. |
IGST on import of medicines for personal use, namely
|
12% |
Nil |
13. |
IGST exemption on goods supplied at Indo-Bangladesh Border haats |
Appl. rate |
Nil |
14. |
Unintended waste generated during the production of fish meal except for Fish Oil |
Nil (for the period 1.7.2017 to 30.9.2019) |
GST rate changes in order to correct inverted duty structure, in footwear and textiles sector, as was discussed in earlier GST Council Meeting and was deferred for an appropriate time, will be implemented with effect from 01.01.2022.
No. |
Description |
From |
To |
1. |
Validity of GST exemption on transport of goods by vessel and air from India to outside India is extended upto 30.9.2022. |
- |
Nil |
2. |
Services by way of grant of National Permit to goods carriages on payment of fee |
18% |
Nil |
3. |
Skill Training for which Government bears 75% or more of the expenditure [ presently exemption applies only if Govt funds 100%]. |
18% |
Nil |
4. |
Services related to AFC Women's Asia Cup 2022. |
18% |
Nil |
5. |
Licensing services/ the right to broadcast and show original films, sound recordings, Radio and Television programmes [ to bring parity between distribution and licencing services] |
12% |
18% |
6. |
Printing and reproduction services of recorded media where content is supplied by the publisher (to bring it on parity with Colour printing of images from film or digital media) |
12% |
18% |
7. |
Exemption on leasing of rolling stock by IRFC to Indian Railways withdrawn. |
||
8. |
E Commerce Operators are being made liable to pay tax on following services provided through them
|
||
9. |
Certain relaxations have been made in conditions relating to IGST exemption relating to import of goods on lease, where GST is paid on the lease amount, so as to allow this exemption even if (i) such goods are transferred to a new lessee in India upon expiry or termination of lease; and (ii) the lessor located in SEZ pays GST under forward charge. |
II. On the issue of compensation scenario, a presentation was made to the Council wherein it was brought out that the revenue collections from Compensation Cess in the period beyond June 2022 till April 2026 would be exhausted in repayment of borrowings and debt servicing made to bridge the gap in 2020-21 and 2021-22. In this context various options, as have been recommended by various committees/ forums were presented. The Council deliberated at length on the issue. The Council decided to set up a GoM to examine the issue of correction of inverted duty structure for major sectors; rationalize the rates and review exemptions from the point of view of revenue augmentation, from GST. It was also decided to set up a GoM to discuss ways and means of using technology to further improve compliance including monitoring through improved e-way bill systems, e-invoices, FASTag data and strengthening the institutional mechanism for sharing of intelligence and coordinated enforcement actions by the Centre and the States.
Requirement of filing FORM GST ITC-04 under rule 45 (3) of the CGST Rules has been relaxed as under:
2. In the spirit of earlier Council decision that interest is to be charged only in respect of net cash liability, section 50 (3) of the CGST Act to be amended retrospectively, w.e.f. 01.07.2017, to provide that interest is to be paid by a taxpayer on “ineligible ITC availed and utilized” and not on “ineligible ITC availed”. It has also been decided that interest in such cases should be charged on ineligible ITC availed and utilized at 18% w.e.f. 01.07.2017.
3. Unutilized balance in CGST and IGST cash ledger may be allowed to be transferred between distinct persons (entities having same PAN but registered in different states), without going through the refund procedure, subject to certain safeguards.
4. Issuance of the following circulars in order to remove ambiguity and legal disputes on various issues, thus benefiting taxpayers at large:
Clarification on scope of “intermediary services”;
Clarification relating to interpretation of the term “merely establishment of distinct person” in condition (v) of the Section 2 (6) of the IGST Act 2017 for export of services. A person incorporated in India under the Companies Act, 2013 and a person incorporated under the laws of any other country are to be treated as separate legal entities and would not be barred by the condition (v) of the sub-section (6) of the section 2 of the IGST Act 2017 for considering a supply of service as export of services;
Clarification in respect of certain GST related issues:
Also read: All you need to know about GST: Benefits, registration, documentation
Article source: Press Information Bureau, Government of India
Image source: shutterstock.com
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